London open: Stocks tread water ahead of payrolls

London stocks were steady in early trade on Friday as investors erred on the side of caution ahead of the latest US non-farm payrolls report.

At 0820 BST, the FTSE 100 was flat at 6,997.27.

The payrolls report is due at 1330 BST, along with the unemployment rate and average earnings.

Richard Hunter, head of markets at Interactive Investor, said: "Ahead of arguably the most eagerly awaited economic release of all, investors continue to grapple with the resolve which the Federal Reserve continues to demonstrate in its fight against inflation.

"The US non-farm payrolls report is expected to show that 250,000 jobs were added in September, compared to 315,000 the previous month, and that the unemployment rate will remain steady at 3.7%. A stronger-than-expected number will send investors running for the hills once more, given that the Fed will retain the green light to proceed unopposed in its policy.

"In contrast, a weak number could prompt hopes that aggressive rate hiking is beginning to take some effect, which in turn would revive the optimism of a Fed pivot which lifted markets earlier in the week."

On home shores, a survey out earlier revealed the housing market showed early signs of slowing in September as house prices nudged lower.

According the Halifax House Price Index, house prices eased 0.1% in September, compared to a marginal rise of 0.3% in August and the second decrease in three months. The annual growth rate also eased, to 9.9% from 11.4%.

The average UK property now costs £293,835, a slight reduction on the previous figure of £293,992, though it remains near record highs.

Kim Kinnaird, director at Halifax Mortgages, said: "The events of the last few weeks have led to greater uncertainty. However, in reality, house prices have been largely flat since June, up by around £250. This compares to a rise of more than £10,000 during previous quarter, suggesting that the housing market may have already entered a more sustained period of slower growth."

Looking ahead, Kinnaird said there were "many variables at play", noting: "While stamp duty cuts, the short supply of homes for sales and a strong labour market all support house prices, the prospect of interest rates continuing to rise sharply amid the cost-of-living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead."

In equity markets, pub group Wetherspoons traded up after saying it narrowed annual losses and that like-for-like sales in the first nine weeks of the current financial year were up 10%. The company posted a loss of £30.4m before tax and exceptional items compared with a £167m loss in 2021 when Covid lockdowns were in place.

PureTech Health slid after it confirmed a possible tie-up with US biopharmaceutical group Nektar Therapeutics. The shares had risen sharply on Thursday on speculation of a deal.

Paving specialist Marshalls tumbled after saying it now expects the outturn for the full year to be below the bottom end of the current range of market expectations for profit of between £95.1m and £101m.

Market Movers

FTSE 100 (UKX) 6,997.27 0.00%
FTSE 250 (MCX) 17,632.64 0.00%
techMARK (TASX) 4,185.93 0.00%

FTSE 100 - Risers

BAE Systems (BA.) 832.00p 1.64%
Imperial Brands (IMB) 1,965.50p 1.11%
BP (BP.) 464.55p 0.91%
Lloyds Banking Group (LLOY) 42.89p 0.85%
BT Group (BT.A) 125.65p 0.80%
Standard Chartered (STAN) 578.00p 0.77%
Shell (SHEL) 2,328.00p 0.69%
Harbour Energy (HBR) 456.00p 0.57%
GSK (GSK) 1,328.60p 0.45%
HSBC Holdings (HSBA) 473.35p 0.43%

FTSE 100 - Fallers

Kingfisher (KGF) 210.40p -1.87%
Rightmove (RMV) 472.50p -1.73%
Flutter Entertainment (CDI) (FLTR) 10,300.00p -1.72%
Frasers Group (FRAS) 654.50p -1.58%
Entain (ENT) 1,128.50p -1.48%
Intermediate Capital Group (ICP) 1,065.50p -1.48%
Ocado Group (OCDO) 451.90p -1.46%
Hargreaves Lansdown (HL.) 872.80p -1.45%
JD Sports Fashion (JD.) 102.65p -1.39%
Rentokil Initial (RTO) 483.00p -1.39%

FTSE 250 - Risers

Elementis (ELM) 99.05p 2.91%
Drax Group (DRX) 555.00p 2.30%
Workspace Group (WKP) 393.40p 2.08%
UK Commercial Property Reit Limited (UKCM) 57.80p 1.94%
Aston Martin Lagonda Global Holdings (AML) 103.25p 1.42%
Wetherspoon (J.D.) (JDW) 443.20p 1.28%
HICL Infrastructure (HICL) 162.60p 1.25%
Bridgepoint Group (Reg S) (BPT) 207.20p 1.17%
CLS Holdings (CLI) 145.80p 1.11%
Capricorn Energy (CNE) 247.00p 1.06%

FTSE 250 - Fallers

PureTech Health (PRTC) 241.00p -5.86%
Travis Perkins (TPK) 782.40p -3.41%
Carnival (CCL) 541.00p -2.87%
Auction Technology Group (ATG) 776.00p -2.51%
Currys (CURY) 63.65p -2.08%
Volution Group (FAN) 319.50p -1.54%
Urban Logistics Reit (SHED) 131.50p -1.50%
Alliance Trust (ATST) 943.00p -1.46%
Howden Joinery Group (HWDN) 516.60p -1.41%
Bellway (BWY) 1,747.50p -1.41%